European shares pared heavy early losses to close flat after mixed data from Europe and the United States, with investors cautiously awaiting the outcome of a meeting between France's President and Germanys' Chancellor on Europe's debt crisis.
After the market closed, France's Nicolas Sarkozy
there was no need to increase the size of the euro zone's bailout fund or create a new "euro bond" to ease the region's problems.
trading at the time of the news conference, fell on the news, potentially heralding losses when European reopen on Wednesday. data from core European economies had seen the urofirst 300 index of top European shares fall as low as 951.03, before closing down 0.09 point at 969.16 points.
Germany, Europe's largestgrew 0.1 percent in the second quarter, while euro zone growth slowed to 0.2 percent. that the impact of the ongoing sovereign debt crisis on confidence and financial austerity measures are increasingly dragging on the European economy," Colin Cieszynski, market analyst Markets Canada,
German truckmaker MAN and automaker BMW fell 3.2 percent and 0.7 percent, respectively, on concerns over the outlook for growth. Austerity measures weighed on Italian utilities such as Snamelectricity grid operator Terna , which traded around four times their 30-day average volume and fell 9.9 percent and 13.6 percent respectively, after increased taxes on the energy sector.
they expected the tax rise to cut 6 percent off Enel's per share and the extension to network companies, which were not covered by the tax before, to hurt Snam's and Terna's EPS by 13 percent.
The euro spent most of the day in negative territory against the dollar as traders speculated that recent growth data and government struggles to keep a lid on the debt problems could force the European Central Bank into rethinking its interest rate strategy. Thisbrings the question of viability of Germany being able to be more involved in out to support weaker economies and thatmay have to look to reverse recentrate hikes," Atif Latif, Director of Trading
Italian and Spanish government bond yields fell as the European Central Bank continued to buy the countries' debt to stop the Europe's crisis spreading. The support also lifted Italian banks which led a marginally stronger banking sector.
The decision by Fitch Ratings to affirm its
credit rating for the United States combined with stronger than expected industrial output data from the world's biggest economy to ease some recession fears by the European close. There was brighter news in the tech sector with companies such as chip designerHoldings and telecom gear maker Alcatel-Lucent up 1 percent and 2.4 percent respectively, while Nokia rose 5.1 percent, followinghandset maker Motorola Mobility on Monday.
Broker Merchant Securities said the $12.5 billion takeover by Google would raise the opportunity for faster product innovation from rivals that will continue to drive the adoption of smart-phones and cellular connected tablet personal computers.
Gold-related equities like Fresnillo and Randgold , up 3.6 percent and 4.1 percent, were again sought after as a proxy for the precious metal which remains near its all-time high as investors, unconvinced over the global growth outlook, bought into its safe haven qualities.
with the readings of economic growth and corporate earnings outlook dropping to levels not seen since March 2009, but this could prompt a rally in equity markets.
"While this mirrors moves in other regions
sentiment in Europe is now much the worst of any region and this looks overdone, potentially setting the stage for an equity rebound, particularly viewed together with the high cash levels seen in the global survey, which have triggered our contrarian buy rule
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